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Is Japan’s Dead-Cat-Bounce Coming To An End?

In this weekend’s free video log we look in some detail at the Japanese Nikkei 225, which earlier this year on May 22nd hit its interim high – up some 91.5% from its interim low in November of 2011!.

The steroid effects of the Abenomics massive monetary intervention have since turned the Nikkei 225 into an almost daily drama punctuated by extreme volatility.

And now once again it appears that we are again approaching a new phase of dramatics drama in the Japanese market. After forming a parabolic price spike into the recent highs, prices subsequently plunged and have been consolidating in what appears to be a relatively straightforward contracting and significant triangle topping patter over the past 5 months.

As this pattern draws to a close our analytics models are now beginning to look increasingly like the most probably outcome is a renewed plunge in prices and that the preceding 5 months consolidation at the highs has only been part of dead cat bounce.

What we are seeing in Japan is amazing, and it looks like the next chapter in the ongoing drama of economics and the market is getting ready to unfold — a drama that no doubt has a lot more in store for us.